China gets tough on North Korea sanctions

The two new additions to the sanctions regime have teeth and show how the Chinese line on sanctioning North Korea has evolved from deep suspicion to clear support.

The UN Security Council finally voted today for resolution 2270, its fifth sanctions resolution against North Korea, two months after a fourth nuclear test was carried out on 6 January. This resolution considerably strengthens the existing sanctions regime to now also include a ban on North Korean exports of mineral resources and mandatory inspections of all cargo going in and out of the country. With Kaesong now also closed, North Korea’s space for legal sources of revenues is further shrinking.

These two new additions to the sanctions regime have teeth and show how the Chinese line on sanctioning North Korea has evolved from deep suspicion to clear support. Foreign Minister Wang Yi had worked at lowering the expectations after the test by describing sanctions as not an end in themselves; and adding that the UN resolution should not “provoke new tension”. China’s bottom line was always that a full trade embargo of the kind imposed unilaterally by the US and its allies was not an option at the UN level. According to a Chinese expert interviewed earlier this year in Beijing, “this is like Chinese medicine applied to cancer: we try to prevent the growth of the unhealthy cells and improve the general condition of the patient rather than burn the whole body with chemotherapy”. In line with this approach, China rejected a more ambitious US draft immediately after the January nuclear test because it included a ban on oil exports, but this time it signed up on a resolution that theoretically will hurt many individuals in North East China who trade minerals with North Korea.

This is in line with the unprecedented harsh line supported by Xi Jinping after the third nuclear test, a mix of isolation, pressure and even humiliation. Political contacts with North Korea were frozen. China took visible steps to better enforce the UNSC sanctions regime, strengthening trade controls and curbing illicit financial transactions – to the point that international organizations and foreign embassies operating in Pyongyang encountered major trouble with their daily operations. China even added insult to injury by receiving South Korean President Park Geun-hye as a guest of honour at Beijing’s September 2015 military parade, commemorating the 70th anniversary of the defeat of Japan in the Pacific War. Such asymmetry in China’s treatment of the two Koreas was a powerful symbolic break from usual diplomatic practice.

This moment of increased convergence between China and the US on North Korea sanctions is being sustained despite what China sees as a deteriorating security environment in East Asia. A pro-independence party ruling Taiwan again and the strengthening of the US military presence in the South China Sea are huge concerns in Beijing. To make matters worse, the North Korean nuclear test has cut short the debate in Seoul regarding the deployment of a powerful radar system in South Korea, as part of the US-led missile defense system. To describe that system – THAAD – Wang Yi quoted an old story: "Xiang Zhuang performed the sword dance as a cover for his attempt on Liu Bang's life" – essentially, Beijing perceives THAAD as targeting China’s newly-established strategic rocket force.

Despite that, what we are experiencing now is clearly a step further in tightening the screws. But there are two important possible caveats. First, there is no sign that diplomatic isolation is still perceived as a good option in Beijing. Last October, Liu Yunshan, a Politburo Standing Committee member, attended the military parade in Pyongyang commemorating the 70th anniversary of Korea’s Workers Party, in a spectacular icebreaking move. China’s six-party talks negotiator Wu Dawei was recently in Pyongyang, which shows an attempt at dialogue rather than isolation.

Second, enforcement remains a major issue, especially because the US-China game on sanctions is made much more complex by the adoption of a new round of unilateral US sanctions earlier in February. The bill signed by President Obama has a clause on “secondary boycott” that targets individuals and entities in third countries dealing with North Korea. This has the potential of poisoning US-China relations. Major Chinese banks now prevent North Korean entities and individuals from holding accounts and have reportedly frozen assets. But the picture is mixed and complex. The North Korean economy relies on a solid network of financial transactions in China’s northeastern provinces. There are also many discreet trade links relying on personal networks, including for imports of North Korean natural resources. Over the years, North Korea has developed sophisticated sanctions evasion strategies, which partly include activities on Chinese soil, as documented by the UN panel of experts’ annual report.

This makes proactive law enforcement by Chinese security services against illicit transactions the key to the implementation of the sanctions regime, and now also a divisive and sensitive issue in US-China relations. Enforcing the ban on mineral exports will hurt hundreds of Chinese traders and officials and will require a major border control force deployment. Similarly, controlling cargo traffic in the ports of Dalian and Dandong will go beyond anything China had previously accepted in terms of monitoring illicit trafficking by the DPRK. What is needed to enforce the sanctions is a huge joint law enforcement operation by China’s Ministry of Public Security and Customs.

Does this matter for Europe? The EU has its own sanctions against North Korea, which also go beyond the scope of UN resolutions; France and the United Kingdom are strong proponents of a more ambitious sanctions regime at the UNSC but are understandably not in the driver’s seat of multilateral diplomacy. In fact, Europe occupies a niche because of its active diplomacy at the UN to shed the light on human rights violations in North Korea. In this context, Europe could work at ensuring that sanctions enforcement allows space for humanitarian exemptions to ensure international organisations such as the World Food Program can continue operating.